Why Tower Group International, Ltd. Shares Popped
Although we don't believe in timing the market or panicking over market movements, we do like to keep an eye on big changes -- just in case they're material to our investing thesis.
What: Shares of embattled insurer Tower Group International, Ltd. spiked 10% this morning after its quarterly results topped Wall Street expectations.
So what: The stock has plummeted over the past several months on growing capital concerns, but a market-topping second quarter -- operating loss of $5.10 per share on revenue of $460.5 million -- suggests that Tower Group's turnaround initiatives are gaining some traction. In fact, management announced that it is reducing its workforce of about 1,400 people by 10%, a move expected to save the company about $21 million in annual costs.
Now what: Management continues to review several strategic options to help deal with its current situation. "To address current liquidity needs at the holding company, we are exploring the sale of some of our holding company and operating assets as well as exploring the possibility of raising additional capital," said President and CEO Michael Lee. "We are working diligently to address these challenges." Given Tower Group's still very speculative nature, however, I wouldn't be so quick to bet on it.
More reliable ways to wealth
Dividend stocks can make you rich. It's as simple as that. While they don't garner the notoriety of high-flying growth stocks, they're also less likely to crash and burn. And over the long term, the compounding effect of the quarterly payouts, as well as their growth, adds up faster than most investors imagine. With this in mind, our analysts sat down to identify the absolute best of the best when it comes to rock-solid dividend stocks, drawing up a list in this free report of nine that fit the bill. To discover the identities of these companies before the rest of the market catches on, you can download this valuable free report by simply clicking here now.
The article Why Tower Group International, Ltd. Shares Popped originally appeared on Fool.com.Fool contributor Brian Pacampara has no position in any stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.
Copyright © 1995 - 2013 The Motley Fool, LLC. All rights reserved. The Motley Fool has a disclosure policy.